How is the Firm Dealing with the Merger? A Study of Employee Satisfaction with the Change Process

Abstract

The purpose of this study was to understand the degree to which employees’ satisfaction with merger-induced organizational changes impact on their productivity and the merged-firm performance. This is because, the introduction of market-driven business reforms in many developing economies has seen the emergence of growth-drivers that includes the search for new markets, increasing competition in local markets, new investors’ interest in emerging markets, and hence the desire for firms to merge. The results showed that human resource issues are important aspects of mergers which, if it is not well handled, may impact negatively on employee satisfaction with consequent repercussions on productivity and the success of the merger. It is concluded that employee satisfaction to a merger-induced organizational changes could be enhanced by instituting effective two way communication system and using participatory approaches in job redesign processes. By implication, merger-induced change has human factor challenges that merging firms need to understand.